Banks can now charge scam victims £100 to get their money back
The new regulations, which came into force on October 7, offer more protections to victims of Authorised Push Payment (APP) scams - where someone is tricked into sending money to a fraudster by a bank transfer.
Previously it was up to individual bank and payment firms to decide whether to reimburse a victim.
However, while victims will now have the guarantee of being reimbursed by up to £85,000, banks will also be able to charge a £100 excess.
The charge is optional, so each bank will decide on whether or not to enforce the excess.
Under the new rules, brought in by the Payment Systems Regulator, consumers should be reimbursed within five business days of their claim.
Up to £85,000 sent from one UK account to another is covered, although banks and other payment firms can reimburse above that amount if they wish.
The limit was originally higher than £85,000, causing some frustration from critics.
Anyone who loses more than £85,000 can raise their case with the Financial Ombudsman, which has a compensation limit of £430,000.
Rocio Concha, Which? Director of Policy and Advocacy said “For too long, victims have been at the mercy of a reimbursement lottery depending on who they bank with. From today, this new scheme should ensure the vast majority of victims are reimbursed and treated in a fair and consistent way if they fall victim to this terrible crime.
“Which? has concerns about the regulator’s decision to weaken the scheme at the eleventh hour by slashing the maximum reimbursement limit, which reduces the incentive for banks and payment firms to take fraud seriously.
“We expect the regulator to closely monitor the protections that individual payment providers put in place to stop scams and be prepared to intervene and increase the threshold.”
When a bank fraud victim won't be reimbursed
When victims of a banking scam have been complicit in the fraud or found to have been grossly negligent, they may not receive an reimbursement.
The Payment Systems Regulator is stressing that customers must remain vigilant of scammers.
It says: "The onus is on banks and payment firms to prove where customers have acted with gross negligence, through ignoring specific, tailored warnings or not responding to reasonable requests for information, for example. "
Staying safe from bank scams
Bank customers should remain alert to potential scammers on telephone, email and even in person as they are continually developing their tactics to try and con unsuspecting members of the public.
One way to use caution is to make sure you are paying the right person or business you think you are. You can check the account name being given using the Confirmation of Payee service.
If you think you have been victim to an APP scam, you should report it to your account provider as soon as possible, and within 13 months of making the payment, the PSR says.
More information about staying safe from fraud can be found at the Take Five to Stop Fraud website. https://www.takefive-stopfraud.org.uk/
David Geale, managing director of the Payment Systems Regulator, said: “Today is a very important day in making it quicker and simpler for victims of APP scams to get back money they’ve lost to criminals, with a guaranteed minimum level of protection in place.
“But not only that, our new requirements will see all payment firms involved facing strong incentives to introduce more robust ways of identifying and preventing these scams from happening in the first place. Firms have already made a good start in making changes and we expect to continue seeing new and innovative systems being rolled out to drive fraud out of our payment systems.”
Read more: